For years the Fed has been lying about inflation.
There are many methods of doing this, but the simplest was to use a “measure” of inflation that did not actually measure inflation at all.
This is the famous Consumer Price Index of CPI. It is meant to measure inflation, but ignores obvious costs of living items like food and energy usage.
Why lie about inflation?
Two main reasons:
1) Doing so allows the Fed and others to overstate economic growth in the US.
2) Doing so allows the Fed to hide the fact that living standards have been in sharp decline in the US for decades.
Regarding #1, all GDP growth estimates include an inflation component. If GDP grows 10%, and inflation also rises 10%, then REAL GDP growth was zero.
But what if GDP growth was 10%, inflation was 10%, but you claim inflation was just 6%.
Poof! You’ve got a great GDP growth number of 4% to produce in the media. Also, this supports your claims that your policies are working.
The US has been doing this for years. But it’s gotten increasingly worse.
Which brings us to #2…
Living standards have been in decline in the US for decades. By some measures, incomes peaked in the early ‘70s and have declined by almost 40% since then.
Rather than spout off a bunch of detailed metrics to support this, let’s use common sense: in the ‘60s and before, most families lived comfortably off of one working parent. Today more often than not both parents work and can barely scrape by.
By lying about inflation, the Fed and others are able to hide the fact that it is getting harder and harder to get by in the US. This supports the BIG LIE, that the Fed and its monetary policies have been a net positive for the US.
They have not.
However, cracks are beginning to emerge in the Big Lie.
More and more members of the media are beginning to note that the Fed has an incredibly terrible record of forecasting growth. This has lead to increased scrutiny of the Fed’s policies and methods for forecasting.
Which is FINALLY leading to some disclosures about how the Fed measures inflation.
The precision of the forecasts, or lack thereof, needs to be kept in mind when setting monetary policy. We must be forward looking, which means we must rely on models to forecast inflation, but there is no one model that forecasts with much accuracy. The best we can do in this situation is to recognize that there is uncertainty around our forecasts.
Despite the central role inflation expectations play in our theories of inflation dynamics and monetary policy transmission, there is still much we don’t know about how such expectations are formed or even whose expectations matter for forecasting inflation and setting monetary policy.
https://clevelandfed.org/newsroom-and-events/...licymaking.aspx
Here is the Cleveland Fed President admitting in “Fed speak” that the Fed’s forecasts, particularly regarding inflation, are bogus.
The Fed is run by money printers. They cannot generate growth, they can only depreciate the US Dollar to create inflation.
Inflation is coming... you need to prepare now.
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